O'Malley Plugs Slots to Bring Budget Balance
By Kate Prahlad
Capital News Service
Tuesday, Sept. 25, 2007
GLYNDON, Md. - Gov. Martin O'Malley will make slot machine gambling part of his plan to close the state's $1.7 billion budget gap, dedicating revenues to education and school construction.
O'Malley announced his proposal Tuesday at Maryland Stallion Station, a horse farm here. The state's horse industry has long pushed for expanded state gambling to boost purses and business at ailing tracks.
O'Malley's plan resembles the House of Delegates' slots bill that passed in 2005. It would bring about 9,500 state-owned and operated slot machines to the state, with the goal of raising $550 million by 2012.
O'Malley urged members of the General Assembly to keep an open mind.
"Compromise is not a dirty word," he said. "There's no dishonor in reaching a consensus."
But House Speaker Michael Busch, D-Anne Arundel, issued a statement Tuesday confirming his opposition to slots.
"My position on gambling has not changed -- I am not an advocate for slot machines," the statement said. "I don't think we can ask Marylanders to step up to the plate and pay $2 billion in taxes while unjustly enriching racetrack owners."
The governor, flanked by horse trainers, breeders, owners and veterinarians on a hill at the Station, said the state's 250-year-old racing industry was at stake, as well as thousands of jobs and acres of open space.
It's "old news" that the lack of slots in Maryland has put the state at a competitive disadvantage and caused the $600 million horse racing industry to suffer, said Thomas Perez, secretary of the Department of Labor, Licensing and Regulation.
Marylanders spend $400 million playing slots in West Virginia and Delaware, contributing $150 million in taxes to those states, according to a report from Perez.
In Pennsylvania, the state garnered $5 billion in the first six months of operating slots, Perez said.
Under the governor's proposal, slots revenue would generate $425 million to fund public education, and $125 million for school construction projects. Another $100 million would help subsidize the horse racing industry.
Richard Hoffberger, president of the Maryland Thoroughbred Horsemen's Association, said slots opponents need to look at the bigger picture.
"People seem to lose focus on the economic impact that investment in the horse racing industry will have on the state of Maryland," Hoffberger said. "You don't have to like horse racing to see it's good economics to bring slots in, and it's a bonus if you do like the horses."
But the opposition still refuses to budge.
Barbara Knickelbein, a co-chairwoman of NOcasiNO Maryland who has been fighting slots since 1995, doesn't think the issue deserves to be on the table again.
"Nothing's changed," she said. "Legislators lose values, waste taxpayers' money and time, and it's still proven that the crime rate goes up where gambling has been legalized."
Knickelbein said the "rich people in the horse racing industry are crying poor," and most own hundred-acre farms and several horses.
The cries of poverty are not coming solely from farm owners and breeders.
Tim Porter, who runs Porter Horse Transportation in Westminster, said his business began to drop off in 2002 and has lessened by 30 percent every year since.
"I used to have seven trucks on the road and eight employees," he said. "Now it's just me, and I'm selling trucks left and right."
Porter supports slots to save his industry and increase his business - but also because he wouldn't want to pay more in taxes to fix the budget shortfall.
Knickelbein refuses to see slots as an alternative to taxes.
"Slots are a tax increase," she said. "A tax on the poor, the people who can least afford to be separated from their money, to balance the budget. It's Robin Hood in reverse, in addition to the social costs."
The governor said he's aware of the downside of bringing slots to Maryland and he will dedicate $6 million annually to treat gambling addictions.
That amount is a "joke," said Knickelbein.
"What price can you put on destroying somebody's life?" she asked.
The price is his livelihood, and that of others in the horsy set, said Porter.
"I've got a license, so I can drive anything," Porter said. "But you love the horses."